Guest Opinion

Iowa cannot afford smaller state government
By Andrew Cannon, Research Associate

As published in the Oct. 22, 2010, Des Moines Register (1-page PDF)



Clean drinking water. Safe neighborhoods. Quality schools. Well-maintained roads.

The disconnect between our tax bill and what our tax dollars actually do has led to the unfortunate embrace of "small government."

Former Iowa Department of Natural Resources Director Rich Leopold told the Register that, as a result of budget cuts to his department, DNR was forced to cut back on mowing grass, emptying garbage and cleaning bathrooms at our state parks. He noted complaints from legislators and small business owners about lost services.

Leopold's response: "You want smaller government, this is what it looks like."

Calls to reduce government carry distorted assumptions. They miss, for example, that the state's general fund spending is actually down as a share of the economy. Likewise, who would know that the state government employs fewer workers than it did in the 1990s? Fortunately, the numbers are available.

Compared with growth in personal income in Iowa, which factors population growth and inflation, Iowa general fund spending has shrunk since the early 1990s. In fact, such spending as a percent of personal income is down 1.7 percentage points from its high-water mark in fiscal year 1991 to 4.7 percent in FY 2010.

But even before the Great Recession reduced state revenues and forced state lawmakers to reduce general fund allocations, state spending as a percent of personal income was lower than it was during the '90s. In FY 2007, well before the recession hit, state spending as a percent of personal income was 5.4 percent, 1 full percentage point lower than its FY 1991 level of 6.4 percent.

Measured by the number of state employees, Iowa has smaller government now than in the 1990s. The number peaked in 1997 at 55,864. By 2007, the state payroll counted 53,427 employees. In the wake of the recession in 2009, the payroll was further reduced to 52,288. Early retirement will mean even fewer state employees by 2011.

Funding for our public universities, community colleges and state aid to local schools make up over 60 percent of Iowa's budget. When candidates, lawmakers and pundits talk about reducing Iowa's government, they mean cutting education.

Our health, businesses and children's economic future cannot sustain a further reduction in state services. We need a state government that is adequately funded to help us stay healthy, keep our economy growing, and secure economic opportunity for future generations.

andrewcannonphoto

ANDREW CANNON
is a research associate for
the Iowa Policy Project,
part of the Iowa Fiscal Partnership.
a nonpartisan public policy analysis initiative.
Its reports can be found at
www.IowaFiscal.org.